PUC meetings set in Sandpoint, Moscow

February 1, 2013

On October 11, 2012, Avista Utilities filed for
an average 4.6 percent rate increase for
electric customers and an average 7.8 percent
increase for gas customers. Staff from the Idaho
Public Utilities Commission will conduct
workshops for Avista customers on February 12 at
7 p.m. at the Sandpoint Community Hall and on
February 13 at 7 p.m. in the Great Room of the
1912 Center in Moscow.

The public workshops will give customers an
opportunity to hear a presentation from
commission staff about how the commission
processes a rate case and the specifics of
Avista’s request. Customers will also be able to
ask questions and provide feedback to commission
staff. The information provided at the workshop
is not to be interpreted as either an
endorsement or opposition to the company’s
request. Later in March, the three commissioners
who decide the case will hear formal testimony
from customers at public hearings, likely in
Lewiston and Coeur d’Alene.

If the increases were granted in full, the bill
of an average residential electric customer who
uses 930 kilowatt-hours per month would increase
by $4.20 to $82.89. The gas increase for a
residential customer who uses an average 60
therms per month would increase by about $4.12
per month to about $56.67.

The commission, by state law, cannot accept or
deny a requested increase without first
considering the evidence. State law requires
that regulated utilities be allowed to recover
their prudently incurred expenses and earn a
reasonable rate of return, which is also set by
the commission. The burden of proof is on the
utility to demonstrate if additional expenses
already incurred were needed to serve customers
and, if so, were they prudently incurred. To
read how a rate case is processed, go the
Commission’s Website at
www.puc.idaho.gov and click on the link,
“Why can’t you tell them NO?” under the Hot
Links in the upper right-hand corner.

The requested gas increase is due to the fixed
costs of providing gas, such as maintenance to
pipelines. Due to declining wholesale gas
prices, the variable portion of gas rates has
been decreasing for Avista customers. In October
2012, Avista electric customers received a 5.6
percent natural gas reduction and 3.4 percent
electric rate decrease. Overall, gas rates
declined by 12 percent during 2012.

Avista claims the electric and gas rate
increases are necessary to expand and replace
its aging utility infrastructure. About 70
percent of the requested electric increase and
48 percent of the gas increase are due to
increases in plant investment, while the
remainder is due to increases in distribution,
operations and maintenance and administrative
expenses for both electric and gas operations.
For example, the company replaces about 6,000
distribution poles each year. Other expense
increases are related to hydroelectric plant
relicensing, mercury emissions compliance and
federal reliability requirements.

The commission’s staff of auditors and engineers
have been reviewing the company’s application
since the case was filed last fall and will soon
file comments as will other parties to the case
including the Idaho Conservation League,
Clearwater Paper, the Idaho Forest Group, Snake
River Alliance and the Community Action
Partnership Association of Idaho, the latter of
which represents customers on low- and
fixed-incomes.

As those comments are filed, they will be posted
on the commission’s Website. Click on the
electric icon, then on “Open Electric Cases,”
and scroll down to Case No. AVU-E-12-08. The
same documents are included in the gas case.
Already posted are the company’s application and
supporting documents as well as public comments
received to date.

The Sandpoint workshop on February 12 is at the
Community Hall, 204 S. First Avenue. The Moscow
workshop on February 13 is in the Great Room of
the 1912 Center at 412 E. Third Street.